Brexit: The Revenge of the Working Class

In the last few days we’ve been hearing all kinds of allegations about the Brexit voters. They’ve been accused of racism, of narrow mindedness, and stupidity in general. We’ve been assured that the Brexit voters are the radical right-wing nationalists. But now come the results of the surveys and demonstrate that the reasons behind Brexit are more complex. It turns out that the main force that turned the tables came from the working-class voters.

In other words, the decision was made by the people who are most frustrated about the new economy and their perceived and very real inability to influence it.

A few months ago I wrote in this blog that the UK is turning into a plutonomy: a nation in which the wealthy and the prosperous are driving the economy, while everybody else tags along. The term plutonomy first appeared in a memo sent by the global bank Citigroup to its wealthiest clients. As the writers of the memo report –

“There is no such thing as “The U.S. Consumer” or “UK Consumer”, but rich and poor consumers in these countries… The rich are getting richer; they dominate spending. Their trend of getting richer looks unlikely to end anytime soon.”

The data reveals that this analysis has much merit. As The Equality Trust reports, the top 10% of earners in the UK have an income over 27 times larger than that of the poorest 10%.

It also turns out that in terms of income distribution, the UK is one of the most unequal developed countries in the world.

Income inequality in different countries in the developed world. Source: The Equality Trust

Of course the rich and the wealthy – residing mainly in London and in the South East – are largely satisfied with current affairs. In the 2014 State of the Nation poll inquiring about the level of trust citizens place in the UK political parties in general, those two regions were the most trusting of all. In the meantime, citizens from all other parts of the country gave devastatingly low grades (an average of 3.54 out of 10) to indicate their lack of trust in UK political parties.

The evidence, when taken together, means that the working class is dissatisfied and frustrated. The average worker in the UK knows he or she has no real power, and is feeling increasingly alienated from the political, economic and cultural elites in London. As Peter Mandler recently wrote –

“…the rest of the country has felt more and more excluded, not only from participation in the creativity and prosperity of London, but more crucially from power.”

So what happens when those citizens of a plutonomy, who realize they have no real power, are suddenly given the option to influence events? They eagerly grab at the rope they’ve been given, and yank on it – and damn the consequences. This is the real story behind Brexit: that of people who’ve been deprived of power for the last decade or two, suddenly being given the chance to make themselves heard. And they certainly did.

This analysis has implications for the future of other countries as well. The United Kingdom is not the most unequal nation in terms of income distribution. There are five other countries in the developed world with worse inequality: Mexico, Israel, Spain, Greece and the United States of America. These are all countries in which large parts of the electorate feel neglected and removed from power in the day-to-day happenings. But once every four years in America, the public gets the chance to choose who’ll sit in the White House – and Donald Trump campaign’s success shows just how much the public wants change and distrusts the current state of affairs.

Conclusions

Brexit is a demonstration of how the inherent tensions in plutonomies can explode, since the rich and wealthy may control the economy, but the current political system still gives some power to the public. This means that the rich still can’t allow themselves to ignore the general public, or the public will come back to bite them when they least expect it.

Right now, the general consensus among the wealthy and the celebrities of the UK is that the public is dumb. It’s not. It’s just frustrated and wants to make a point. If the people on top want to avoid such disastrous decision making in the future, they should stop blaming the public, and instead find ways to change the political environment so that the public will gain more power in the daily affairs of nations. Any other course of action would lead to tensions building up again and being released explosively at the next Spainexit, Greecexit, or – who knows – maybe even Trumpexit.